The Trend Of The Renminbi Once Again Touches The Hearts Of The People.

If we start from the formation mechanism of the RMB exchange rate in August 11, 2015, until the establishment of the RMB index in December 2015, the RMB trend will have a distinct policy mark, and a new anchor basket for the RMB exchange rate will be established. Then, the new round of RMB exchange rate going down before and after the new year's day in 2016 is accompanied by a panic attack that releases the risk rapidly.

In the early January 5, 2016, the yuan hit a new low of more than four and a half years from the middle price of the US dollar, down 137 basis points from the previous day, and fell for the sixth consecutive trading day.

The day before January 4th, the central parity of RMB against the US dollar dropped by 96 basis points, breaking through the 6.50 pass.

On the day of offshore market, the spot exchange rate of RMB against the US dollar fell nearly 700 basis points, down 6.6.

Market expectations

Although the exchange rate will remain weak, it is still in the controllable range, especially before entering the SDR.

Since then, the renminbi has been falling from the middle price to the offshore market, and accompanied by the stock market crash and capital outflow, which shows that the situation is grim.

If the bearish expectations are accumulated, the damage to the market will be greater.

HSBC analysts predict that the euro yen trend will be stronger than the US dollar in 2016, and the renminbi will weaken further against the US dollar.

Risks continue to accumulate, but they are still in the controllable range.

Referring to data from Mr. Wan Zhao, an analyst at China Merchants Bank, since the beginning of 2013, other emerging economies have experienced a serious currency crisis, while the renminbi is the best performing currency in emerging economies.

Linked to a basket of currencies, it gives the yuan a very broad flexibility.

But it also means that the appreciation of the RMB against the US dollar in 2016 is hard to achieve.

In the middle of 2015, according to IMF's standards, such as Citibank and faxing bank, the scale of China's foreign exchange reserves was fairly qualified, but it was not particularly abundant.

Earlier, there were institutional speculation that the Central Bank of China has learned from other countries the use of swaps and other means to maintain currency stability in addition to the use of large banks to stabilize their exchange rates.

Using swaps and making the market go up or down at a special moment is an important means in the current defensive war.

Of course, now is not the time for counterattack, but the time for guerrilla warfare in defensive warfare, and can occasionally attack and capture some "enemy" ammunition.

According to the data released by the foreign exchange trading center in December 28, 2015, the CFETS RMB exchange rate index in December 25th was 100.87, an increase of 0.87% compared with the end of 2014, which increased by 1.61% and 0.07% respectively compared with the basket of BIS currencies and the basket of SDR currencies.

In December 31, 2015, the CFETS RMB exchange rate index increased by 0.94% compared with the end of 2014, compared with the basket of BIS currencies and the basket of SDR currencies respectively appreciated by 1.71% and 1.16% respectively.

It can be seen from it that the different monetary weights in the currency basket are very important to the RMB exchange rate, according to the CFETS currency basket and the BIS currency basket.

Still rising steadily, which means that emerging markets and temporarily downdeveloped developed market currencies have become the cornerstones of stability.

Although there are institutions looking for Renminbi, although the A share market in the first trading day of the new year is larger than that in major overseas capital markets, the central bank has announced a lower RMB to us dollar price in the second day, because China has already linked the currencies of the world's major economies and does not want to pay for the US dollar again.

In this sense, the weakening trend of the RMB against the US dollar may not be over for the time being.

If China's economy is at risk, the main risk is, of course, from the inside. First, whether foreign exchange reserves of 3 trillion yuan can maintain monetary stability, followed by the ability of resource allocation.

At present, the implementation of a positive fiscal policy means that the government still holds the most important resource allocation power. If the government's resource allocation efficiency can not be improved, then stabilizing the economy may not achieve much effect, including maintaining monetary stability.